Holland America Acquires 50 Percent of Windstar

At a press conference in New York, Nico Van der Vorm, Chairman and Chief Executive Officer of Holland America Line, and Jean-Claude Potier, President of Windstar, both stated that this in "no way represented a merger or integration." Neither was willing to release the amount. But according to sources HAL invested $12 million in Windstar.

According to Potier, Windstar will maintain its management and offices in Miami, while the investment means a capital infusion for the third and possibly a fourth ship.

Van der Vorm said that he sees a great compatibility in the quality of the two companies' products and the partnership will enable HAL to offer more choices to its alumni.

Windstar Sail Cruises initiated a private placement seeking additional financing of $5 million several months ago, which was never completed, according to Karl Andren, Chairman of the cruise line.

Taconic Holdings now holds the other 50 percent of Windstar Sail Cruises. Andren holds the majority interest in this company, with Stolt Nielsen. (Windstar was capitalized by Taconic with an equity of $6 million.)

Andren added that with a brand new product, it takes a long time to achieve market recognition, especially among travel agents. "There are many of us out there," he said, "who present artists' renderings to travel agents. Individual sales took off only after agents had actually seen the ship."

Potier said that for the line's first year of operations, half of its sailings were incentive charters. Industry analysts say that incentive charters tend to be less profitable, especially for a start-up operation, as these big customers have much more leverage negotiating prices.

According to sources, individual books have developed slowly.

Andren admitted that it has taken more time and money to market the cruise line than was anticipated, although no one thought it would be easy. "Don't kid yourself," Andren said, "this is a tough marketplace."